AT&T has just launched Aio Wireless, a new prepaid cellular service that boasts the iPhone as one of their flagship devices. Since it is a prepaid service, Aio offers plans without a contract, and users can either bring their own compatible device, or buy it from Aio at full price. AT&T touted the simplicity of the service in a statement today.

Today Aio Wireless announced the launch of a new nationwide wireless service for consumers interested in a first-class wireless experience at a value price, without an annual contract. Aio provides new choices, seamless customer experience, and simplified service and offerings to value-conscious customers interested in an unlimited talk/text/data plan with no annual contract.

Aio’s plans do come with unlimited data, but your speed will be throttled after a limited based on the plan you choose. For instance, the Aio Smart plan, at $55 per month, offers 2GB of high-speed data before lowering your speed, while the Aio Pro, at $70 per month, plan gives you 7GB. Also. while Aio calls its data speeds “4G”, those speeds are up to 4Mbps, indicating that LTE is not offered yet.

Aio launches with full support for the iPhone 5, displaying it prominently on its front page and selling the device through its online store. But because this is a prepaid service, buying the iPhone can be expensive, with the 16GB model starting at $649. While that might not be daunting to customers used to paying full price for their phone, those new to the prepaid market might experience some sticker shock.

Aio Wireless launches in Houston, Texas, and in Florida in Orlando and Tampa today, with plans to expand across the U.S. over the next year. Anyone considering a switch?

I dont have much knowledge on the subject so can someone please explain to me why At&t has to make a subsidiary company to offer value plans rather than improve their current pre-paid offerings under the at&t brand?